In a press release today, Finnish network infrastructure giant Nokia announced that they will “reset its cost base to invest in future capabilities.” Behind the vague title is the intention to cut from 5,000 to 10,000 jobs and achieve 600 million euro in savings by 2023.
Nokia today has approximately 90,000 employees and the plan is in the next 12 to 24 months to reduce that number by 5,000 to 10,000 employees. The associated cost of “resetting the cost base” is 600 million to 700 million euro, “of which approximately 50% is expected in 2021, approximately 15% is expected in 2022, and approximately 35% is expected in 2023,” says the press release. The press release also mentions 500 million euro of cash outflows related to previous restructuring in that period.
The savings made on manpower should offset increased investment in Research and development, “future capabilities” and “costs related to salary inflation.” The parts of the business that might see the most changes are the “Mobile Networks” and “Cloud and Network Services”, while Nokia Technologies should remain intact.